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Poor economic prospects: companies find it harder to get fresh loans

2023-01-12T07:20:15.101Z


Many banks in Germany are reluctant to grant new loans to companies because of recession concerns and rising interest rates. The self-employed in particular find it more difficult to get fresh money.


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In view of rising interest rates and a feared recession, companies in Germany are finding it more difficult to obtain new bank loans.

29.9 percent of those companies that are currently negotiating a loan reported reluctance on the part of the banks in December.

In September it was only 24.3 percent, as reported by the Munich Ifo Institute.

"The banks are gradually increasing lending rates and are more cautious about lending," said Klaus Wohlrabe, head of the Ifo surveys.

“The days of low interest rates are over for the time being.” Many companies would have to get used to it and adjust their financing structure.

The banks are taking a closer look at the service providers in particular: 34.6 percent of the companies looking for credit reported that the financial institutions had become more restrictive.

The gastronomy in particular stands out with 67.7 percent.

In industry, the value was around 28 percent.

In retail it was almost 21 percent.

Micro-enterprises and the self-employed continue to be hit hardest.

Almost every second service provider in this segment reported problems getting fresh money.

"The current economic situation is difficult for some self-employed people," Wohlrabe said.

“The bank loan is still one of the most important financing instruments for them.” This exacerbates the situation for many self-employed people.

According to economists, the German economy is heading for a recession as it is being hit by the energy crisis, material shortages, rising interest rates and high inflation.

However, hopes have recently grown that there will be no sharp slump and that there will only be a mild recession.

The Ifo Institute, for example, only expects a mini decline in gross domestic product of 0.1 percent this year.

A feared wave of bankruptcies by companies has also not materialized so far.

ssu/Reuters

Source: spiegel

All business articles on 2023-01-12

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